Archive for the ‘Thin Film’ Category

A New Year Greeting

solar bankability

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PV Module Form Factor Evolution – Enter SolarClover

The standard PV panel design is essentially a 40+ year old packaging scheme, whether you are talking about crystalline technology or thin-film (glass on glass). It is a form factor that has served the industry well up to this point, but as my readers know, I believe it is keeping the pace of PV adoption from increasing further.  I have long been a proponent of new, lightweight, aesthetically pleasing, and easier-to-install PV modules.  While flexible thin-film has enabled some interesting products from a limited number of vendors, desirable economics and durability for these products is a long way off.

SolarClover solar energy

SolarClover – A New Paradigm for Solar Energy

Enter Armageddon Energy with their unique, well thought-out product, the SolarClover. Clover is a completely new form factor which packages high performance mono-crystalline PV cells on a hexagonal , extruded plastic-aluminum sandwich backing, with a unique polyamid front sheet. Heavy, costly glass and metal framing is eliminated and the resulting product is unbelievably light. The hexagonal modules are then placed on a simple metal tripod racking system which utilizes 3 quick bolts for assembly.  Each tripod has a micro inverter and holds about 450kW of rated output, takes less than 10 minutes to assemble and less than $100/kW to install. Industry average for residential solar installation is $300+/kW to install. Plug and play solar deployment has arrived.

SolarClover shipment packaging is IKEA style flat cardboard boxes – an entire 1kW AC system fits into a standard contractor van, in one truck roll.  And while it’s tempting to look at this product for the DIY market in an outlet like Home Depot, Armageddon is targeting professional tradesmen like roofers, plumbers and electricians to handle installations.  The company provides a clever and patented low cost tool for determining siting applicability – shading, roof orientation, etc. – called the Clover Analysis Tool (or CAT) which substantially lowers the challenges for experienced contractors already servicing the general residential market place but with limited solar energy experience.

SolarClover is centered on providing visually pleasing PV systems to the smaller size residential market where a standard 1kW to

SolarClover new look for PV

Quick Plug and Play Assembly – click to enlarge

2KW Clover system can add enormous cost reduction to electricity consumers with high utility rates, especially in places where peak demand charges are present. Pricing is currently just under $6/Wac with the expectation that scale-up of manufacturing and operations will reduce cost substantially.

Mark Goldman is the high energy founder of Armageddon who clearly has a strong product development and marketing capability and understanding of this market niche.  “We’re focused on the utility consumer who only needs a small PV system, and we wanted to provide those consumers with a system that can be easily installed by their current contractors and is a really elegant addition to the architecture of their home.  We look at the electric grid as a system we’re optimizing for the small residential consumer who will experience significantly lower electricity bills and a quick return on their solar investment.”

Interestingly, Solar Clover has real applicability in the military market in operational and forward deployed environments where simplicity, light weight, quick set up and break down, and high performance are key attributes.  More on this later.

Solar Clover is not without its technology and market challenges. They include things like solar cell packing density, snow loading durability and a small installation cost (difficult for installers who are used to commanding larger invoices).  These are engineering and marketing issues common in new technology commercialization and Mark has a solid roadmap to mitigate and overcome these challenges as volume increases and his technology partners innovate along with him.

This is exactly the kind of form factor innovation that the industry needs to significantly broaden the appeal of PV through lower cost, ease of installation and aesthetics. Early adopters, this is your product and who knows, maybe this is what I will put on my own roof during a planned renovation.

 

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Solar Industry M&A – Really?

With the collapse of publicly traded solar stocks in the last 4 months, the general business press has been buzzing with speculation about mergers and acquisitions. But these articles have missed some basic industry drivers and circumstances that may point to minimal M&A activity. A good example includes a recent Bloomberg article about how First Solar is a take over target for GE and Siemens as FSLR’s share price has fallen from $156 in Q1 2011 to $36 today losing enormous value.

First Solar - M&A Target?

While I have tremendous respect for what FSLR has accomplished and believe that high performance thin-film will be a factor at some point in the longer term, rapidly changing market dynamics have caught up with the company.  Manufactured costs of crystalline silicon PV modules have dropped much more rapidly than thin-film as a category or FSLR could match.  Indeed, FSLR’s stated guidance was to decrease manufacturing cost by $0.05 per Watt during the last 18 months compared to a $0.20 – $0.35 per Watt decrease by a variety of crystalline providers.

Solar thin-film as a general category is lower in efficiency, which requires more land/space, balance of systems (inverters, racking, wiring, permitting, administration) and as such, requires a module sale price differential from a crystalline module of approximately 30% to remain competitive. Currently the delta between the 2 module technology types is only 6% – 10% in the spot and long-term contract markets respectively.

The thin-film business model as a general category in the current environment is broken. (exception may be Solar Frontier) While First Solar has their downstream project development and EPC capability glossing over the module manufacturing cost problem, this will continue to be a problem for the foreseeable future. And with behemoths like Samsung, LG, Hyundai and now Foxconn about to enter the market with aggressive low cost capabilities and significant resources, the pace of cost reductions will continue.

I would be more than surprised if GE (especially since GE has its own thin-film effort with an integrated BOS approach) or Siemens or similar entities would buy FSLR with the current market dynamics in play. If the price becomes low enough, they may have interest in FSLR’s substantial project pipeline but that would need to be significantly lower than the current $36 price.

Overall, acquisitions in the PV module manufacturing industry don’t make much sense even at the current low valuations unless there is valuable IP present or there is a substantial project pipeline as a result of downstream integration. This is because the barriers to market entry are quite low. Manufacturing equipment used throughout the supply chain is generally American and European made off-the-shelf production machines with willing and able companies such as Applied Materials ready to supply. Additionally, most Asian solar manufacturers have no brand value established worth purchasing. Foxcon’s entry in the PV industry is a good example where no existing company or capacity was purchased, opting instead for the latest, highest efficiency manufacturing platforms available while partnering with an existing Chinese poly silicon company for raw material supply.

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Solyndra – A Solar Industry Side Show

Solyndra, the high profile bankruptcy in the solar energy industry, continues to generate media attention as a result of the $520M US government loan guarantee. While the attention is driven by political competition to portray the Obama administration as inept and the green jobs program a failure,  and Solyndra claiming it could not compete with highly subsidized Chinese manufacturers, the media misses the main reason for the failure.

Solyndra was an outlier. It was a completely non-mainstream, highly risky technology commercialization play which had no technology history to support a reasonably quick, low-cost commercialization ramp.

An Automotive Outlier

The Solyndra technology and design was highly suspect from the moment it came out of stealth mode. Basic issues included round CIGS thin-film solar cells, which when deployed, had half the solar cell facing away from the incoming solar radiation. CIGS is still a developing story with many challenges on traditional flat plate modules, let alone a round tube. Optical experts found that the reflective claims (that sunlight hitting the white roof membrane underneath would reflect back at high intensity to the underside of the tubes) were highly suspect because of the loss of photon intensity during reflection. The high maintenance cycle for keeping the white membrane clean was another issue.

Of course manufacturing this type of completely new technology was expensive and Solyndra was selling at loss even before the recent crater in crystalline module prices. With scale of manufacturing always being the holy grail for reducing cost, it was hard to see how this would be accomplished without more investment capital in a company that already had $1B in investment capital. Raising additional capital with that cap table size would be more than difficult.

A PV Technology Outlier

The main issue for Solyndra and other new solar technologies that are not highly disruptive (through high exponential cost and performance advantages), is that it is extremely difficult to compete with the crystalline PV industry’s  40-year history and over $50B in cumulative R&D investment.  A complete explanation of this history and advantage can be found here.

The Solyndra event would seem to be another good example of herd mentality investing. Most people in the PV industry never took the concept seriously and mar veled at money as it poured in to Solyndra compared to far more worthwhile PV technology commercialization companies.

The one positive lesson that Solyndra taught was that different form factors and smart installation design can have a significant impact in desirability. Many downstream installers

Form Factor Lessons To Learn

and EPC companies were somewhat dubious of the technology performance.  With Solyndra’s pricing lowered to make projects viable (especially on roofs with weight limitations), they had the opportunity to work with the product and understand these advantages, and had significant enthusiasm for these features.  It’s a good, real-life product engineering test for the PV industry to take notice. Flat plate solar modules are not the only form factor in the future.

The PV industry has an incredible history in the last 7 years with average year over year growth of 60% through 2010. The industry is near $100B in revenues globally and employs millions of people throughout the supply chain both directly and in residual economic activity. The kWh cost of electricity from a PV system is now at or nearing grid parity in vast swaths of the developed world’s economies with minimal or no government support. (And doing so while competing highly subsidized fossil fuel, nuclear and hydro power) Solyndra is a mere blip in evolution of the PV industry and a complete sideshow in an industry that has been the fastest growing throughout the global recession. Unfortunately for the PV industry, the Solyndra story will continue to be a major political story as the 2012 election cycle ramps up and obfuscate this great history.

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Video Resouces for PV Manufacturing – Don’t Mind the Music!

In response to questions about how a solar cell operates, how labor cost aren’t a big component of the module price and the technology differences, following are a few solar panel, solar energyvideos that provide some answers and detail.

1) Energy 101: Solar PV

A great video for the U.S. Department of Energy on the basics of photovoltaic’s. Good visual on how a solar cell converts photons to electricity toward the end.

http://www.youtube.com/watch?v=0elhIcPVtKE

2) Crystalline Module Manufacturing

Corporate video from Spire, a leading U.S. based module assembly company that provides automated module production machinery.

http://www.youtube.com/watch?v=HUO3MDH_4Qo

3) Crystalline Solar Cell Manufacturing

Somewhat outdated corporate video from Q-Cells (no longer 2nd largest cell manufacturer) but gives a good view of the manufacturing facility.

Solar panel, solar energy

Module Assembly - Stringer Tabbing

http://www.youtube.com/watch?v=9KECQS-W6xg

4) Amorphous Silicon Micromorph Thin-Film Manufacturing

Sungen corporate video (apologies for the background music!) with good visuals and narration on the process.

http://www.youtube.com/watch?v=fNwZrKR4gRI&NR=1

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Thin-Film PV Powers the Number 1 Global Solar Integrator

Belectric Trading GmbH, formerly Beck Energy GmbH, was recently named the number one solar EPC company globally with over 300MW installed in 2010. Belectric, headquartered in Germany, focuses on large utility scale projects and has over 1,000 employees in 14 countries including a recently opened U.S. office.

solar thin-film bankability

Belectric Install In Germany - Source: Belectric

By either name, this is not a recognizable brand as the company is privately held and tends to keep a low profile. But what is recognizable is their exceptionally low installed cost, the reason for their number one position.

With tangential thin-film involvement with Beck Energy early in the previous decade, I heard their continual emphasis on LCOE by focusing on an integrated solution and centering on thin-film PV. They have achieved exceptional LCOE by innovation in design, engineering and construction as well as proprietary BOS and installing mainly thin-film modules, mostly from First Solar.

The fact that they have achieved such success using thin-film modules is surprising to many in the PV industry.  There is continual disagreement between traditional crystalline module fundamentalists (crystalline modules have 80% market share) and thin-film PV fundamentalists over advantages and disadvantages of each. But Belectric’s model utilizing thin-film in a proprietary solution results in winning many bids as they can provide strong Internal Rates of Return for project investors. Solar bankability never looked so good.

As I have said previously on this blog, thin-film PV has a good fit for many applications and when coupled with a strong BOS strategy, the result can be exceptional. The Belectric story is a powerful example.

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Happy New Solar Year

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Solar Energy – Many Types, Many Applications

Recent announcements by the U.S. Department of Interior regarding approval of large solar energy installations have generated a number of questions and a lot of excitement.

Solar tower, solar energy

Solar Power Tower

On October 24th, U.S. Interior Secretary Ken Salazar approved the $6 billion Blythe Solar Project to be built on 7,000+ acres in California’s desert region. Another approval came through for the Ivanpah Solar Project, which will produce enough energy to power the equivalent of 140,000 average American homes each year. The Blythe project will be the largest solar generation installation in the world, and is based on large solar thermal system technology with the acronym CSP.  This is where the questions come up.

Solar energy can mean many things to many audiences. A good recap of various solar technology types can be found here.

Solar module

Solar PV Module Components

Photovoltaic (PV) solar uses semiconductors and other cell technologies to convert photon energy directly to electricity with no moving parts within the cell apparatus.  Cells are placed in series in modules of various sizes, and modules are designed into entire arrays for residential, commercial and larger utility scale systems.

Concentrating PV (CPV) uses various optical light concentration schemes and devices between the sun and the PV cell to produce more energy.  These systems typically require accurate 2-axis tracking of the sun.

Solar thermal technologies are used for a variety of applications. Solar thermal uses the sun to heat water for direct use in solar hot water systems, or heats special fluids for use in a heat exchanger.

Common small-scale solar thermal systems can be found on residential buildings to heat hot water rather than using electricity.

Solar Concentrating Dish with Sterling Engine

Concentrating solar power (CSP) usually refers to larger utility scale systems that flash water to steam at industrial scale to power turbines similar to those found in coal burning plants.  CSP comes in a variety of technology types including parabolic linear troughs, power towers and dish/sterling engine systems.

Both CPV and CSP require strong solar resources like those you’d find in the desert region of the United States or in North Africa. These technologies are not suitable to higher latitudes and intermittent cloud cover.

With the price of PV modules and installation costs plummeting over the last 2 years, PV is disrupting many long held assumptions about application suitability. High thermal heat CSP technology may not be competitive in many applications, as the installed cost and LCOE is higher in many instances than PV. A good review of the situation from Michael Kannelos at Greentech Media can found here.

CSP requires large installation sizes, frequent maintenance due to a large number of moving parts, and uses large amounts

CSP Linear Trough

of water resources in many instances. But CSP has excellent storage capability and still produces useful cycling well into the evening.

The other issue with CSP is large capital costs. In order to reach competitive kWh cost, these plants need to be large and cost in the $ billions, creating large financing heartburn.

PV has the advantage of being a direct photon to electricity generator with little complexity. Heating water and then using the heat energy to drive a turbine or sterling engine has built-in complexity in energy production, efficiency and maintenance.

Additionally, PV is modular and can be installed in stages. This reduces the financing heartburn as bulk capitalization is lower, allows the array to scale on a defined timeline, and allows for rapid installation.  In this regard, solar bankability may be more common for PV in the future.

Generally, all of these technologies have advantages and disadvantages depending on application.  And with global electricity demand 20X more than planned capacity, the time is now for large adoption strategies to be implemented.

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Price/Performance Improvement Enabling Thin-Film on Rooftops

Historically, the residential and commercial rooftop solar energy market sectors have been dominated by solar modules using crystalline silicon wafers. Recently, the utility Southern California Edison began implementing the first phase of a 500MW project plan which is mainly supplied via 1MW installations on large (larger than 100,000 ft2) roofs. The program, which demonstrates the unique distributed generation nature of PV, is using First Solar thin-film product for some of the installation sites along with crystalline vendors including efficiency leader Sunpower . Once the exclusive domain of crystalline wafer modules only, the cost and efficiency of high performance thin-film product like First Solar’s produces acceptable internal rate of return for system owners on rooftops where many variables line up for this technology type. An article today in USA today features a good overview of the program and a picture of installers placing First Solar modules into service.

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Both Sides Now: The Thin-Film/Crystalline Debate

A financial industry client recently asked whether “thin-film” PV product can ever compete with highly established crystalline PV technology based product which currently has 85% market share.  His question was prompted by a spate of recent press articles that talk about the 50% drop in module sale prices in the last year, with claims of margin pressure on the thin-film category.  A good summary of the situation, here.

Like all things related to solar energy generation, there are many factors to consider.  First, thin-film is a broad term; there are many technology types with different performance capabilities, cost points, and structures which factor heavily in a comparison to crystalline products.

Read the rest of this entry »

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